People with no credit rating can find it challenging to qualify for a home loan, rent an apartment or buy a car. Credit history is an important aspect of a credit rating, but the history must begin somewhere. Consumers with no established credit rating can begin their history with certain types of credit card accounts. These accounts are often easier to obtain than unsecured bank cards, but they report payment activity to all three credit bureaus.

Secured Credit Card Accounts

One type of credit card account that is easily accessible to people with no credit rating is a secured card. Secured credit card accounts are backed by a cash deposit. Consumers who open secured credit card accounts can only charge an amount equal or less than the cash collateral deposited with the lender.

This secured set-up makes default on the account impossible. One downside to opening a secured credit card account to build a credit rating lies in the amounts and types of fees involved.

Lenders offering secured credit card accounts often charge an application fee as well as a monthly service fee and possibly an annual fee. The fees can vary significantly between lenders; make sure to read the fine print thoroughly before opening this type of account.

Merchandise Cards

Another type of credit card account that consumers with no credit rating can use to establish credit history is an unsecured merchandise account. Merchandise cards are technically retail credit card accounts, but they are different from department store credit card accounts due to the fee structure involved.

Merchandise credit card accounts are issued by specific merchants for items listed for sale on their website or available for sale in their store. Merchandise card accounts commonly involve application fees, monthly fees and annual fees.

Gas And Retail Cards

Gas and department store credit card accounts are additional options for consumers who wish to establish a credit rating. These cards often have high interest rates and are applicable to in-house purchases only. Initial credit lines are often low, but they do report the payment information to the credit bureaus. Gas stations and department stores offer credit card accounts through finance companies rather than large banking institutions.

Finance companies can be more flexible in offering credit to people with no credit rating than large banks. Some department store credit card accounts may have an application fee, but the primary concern for these types of accounts lies in the high interest rates.

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